Executive summary - Udo Bullmann

The new owners embarked on a radical restructuring program. The main features (there is some discrepancy in thefigures give by different sources) were as follows:• Fees to motorists were raised by up to 30%• As a result profits doubled to 200m (2005 on 2003)• The staff cuts led to problems delivering services and caused a consumer magazine to downgrade the AAfrom the best to the third-best in terms of response time.2.5 Management policies and shareholder activism: stock option programmes, effects on boardand CEO’s, management fees, employee informationIn the spring of 2006 a further GBP 500 m was to be raised in order to make a special dividend payout (I have notbeen able to confirm whether this actually took place).Tim Parker, AA Chief executive, is reputed to have earned GBP 20 m in bonuses, with a further handsome payoutwhen the AA is floated off. Mr Parker, who previously ran Kwik-Fit, also for CVC, is reckoned to have bagged[pound]20m after he cut the workforce there from 10,000 to 7,000 and sold the car repair business to French privateequity house PAI. A sale of the AA would lead to another multi- million pound windfall for Mr Parker. 3 (not thesource, but the content is the same. You probably have to rewrite, as I cannot find the article. Perhaps it is in thecanteen of Marie Odile)3. LBO exit (secondary, LBO, listing)There is considerable speculation that the AA will soon be sold on(Sources: Media reports and GMB.)3 AA BOSS ADMITS CUTTING TOO MANY JOBS - INDEPENDENT 27TH NOVEMBER 2006